Most law firms, unlike other businesses, categorize associates by law school graduation year rather than level of expertise for purposes of hiring, compensation, and promotion. Until recently, the traditional lockstep model made some sense, assuming that associates who enter law practice at the same time gain like experience at similar firms. Class year designation, therefore, was convenient shorthand for a certain skill set. In the current environment, however, where so many lawyers were unemployed or underemployed for significant periods, JD year no longer accurately indicates a particular level of expertise or professional development. This situation has given rise to new models for associate development.
Traditionally, large law firms followed the lockstep model, hiring attorneys into classes based on law school graduation year. Members of the same class year at similar law firms handled comparable tasks, received virtually the same base compensation for their market region, and advanced along the partnership track at essentially the same rate. Only in extreme and rare cases was an associate been held back and unable to progress to the next class year. Therefore, graduation year served as reasonable shorthand for a particular skillset. Painfully, large law firms learned that those strategies didn’t work as well after the Great Recession, when so many lawyers lost their jobs or found themselves doing less sophisticated work. As business began to improve and firms needed to replenish their associate ranks, they found that not all candidates of the same class year possessed similar experience. Candidates had varying tenures in large law firms before, perhaps, being downsized, and cobbled together differing kinds of experiences in the meantime. Therefore, candidates from a particular graduation year didn’t necessarily fill the bill.
Law firm recruiters and legal search consultants began questioning the traditional ways of hiring lawyers: When partners need more associate support to service client needs, are they really looking for candidates from a specific graduation year? Or are they using that as shorthand for the required skillset? If shorthand, is it an accurate translation in the post-recession marketplace? Other businesses, and even in-house legal departments, hire candidates based on their skills rather than graduation year. Why should law firms be different? Moreover, law firms hire their non-lawyer professional staff based on skills. Why should they not do the same with associates?
In response to the economic downturn, law firms rethought their traditional models for integration, training, evaluation, advancement, and compensating associates. Many moved away from lockstep to competency-based performance measurements for those decisions; perhaps some of those solutions also could work for hiring associates. A skills-based lateral recruiting model, rather than class-year hiring, could address the disconnect between associate talent supply and hiring demand.
American Lawyer‘s 10th annual Law Firm Leaders survey showed 53 percent of the top 200 firms implemented a competency model for associates. In a core competency system, there are three for four levels or bands of associates, with specified skills expected at each level. Lawyers must master the skills required at their current level before advancing to the next band, and must graduate through all competency levels before partnership consideration. Training programs are tailored to competencies; compensation and billing rates also align with level. This model creates a standardized framework allowing associates to identify the skills they need to progress. Moreover, it gives partners the tools to effectively evaluate and compare associates’ development.
To implement a core competency system, firms first identify competencies required across all practice areas. Then, each department also develops a skills list, tied to the levels, outlining practice area expectations. In addition to sorting lateral associates by specified law practice experience, the core competency model can identify other “soft” attributes required for success in the particular law firm environment. Business skills such as leadership, team attitude, management, organization, and negotiation abilities add value. Depending upon the firm’s culture, candidates who “fit” also might possess, to varying degrees, personal qualities such as empathy, listening, relationship building, enthusiasm, and the like. While maturity may play a factor, class year provides little guidance for assessing these attributes. With lateral hires, the firm attempts, through the interview process, to evaluate where each candidate measures against their model.
Some firms utilize a hybrid system, combining aspects of both the lockstep and competency-based models. They might have lockstep compensation, but look at competencies for performance evaluations and advancement. Associates receive extensive feedback and thorough skills-based reviews, yet their base compensation is set by class year. Any differentials in performance are addressed through merit bonuses.
Historically, the lockstep system worked rather well when no economic downturn impacted the flow and type of work available for associates. In response to new realities, law firms still using the lockstep system found it necessary to implement more sophisticated means to recruit and retain top talent, and train and assess their associates. Most adopted more complex associate compensation review processes. Thus, even the more traditional firms are taking individual performance into account to some extent.
Which is it?
With these changes in legal hiring, as a job seeker, you need to get more detail regarding precisely what skills and functions are needed to meet the needs of the firm and its clients and how you would slot into their structure. Ask also about “soft skills” necessary for success in the firm culture. You need to know what kind of promotion, evaluation and compensation models the prospective employer uses – traditional lockstep, core competencies, or some hybrid system. If the firm utilizes a competency-based system, what are the bands or levels, and what skills are required at each level? What is required of candidates during the hiring process to demonstrate the applicable skills? How do they slot laterals into their model, both in terms of seniority band and compensation, especially if they’re coming from a firm with a different model?
New economic realities require that law firms break tradition, jettison class year shorthand, and take a closer look at how they recruit and hire lateral associates. While skills-based hiring requires more thought and effort by all parties up front, it not only will help address the problem of hiring and integrating disparately-trained lateral associate candidates, but also lead to more appropriate and successful hires in the long run.